Rural Development: Some Emerging Research Possibilities at ERS
Transcript of Rural Development: Some Emerging Research Possibilities at ERS
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
Rural Development: Some Emerging
Research Possibilities at ERS
Timothy R. Wojan
Economic Research Service/USDA
National Association of Community Development
Extension Professionals
Little Rock, Arkansas
May18, 2015
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
One can count the number of seeds in
an apple, but not the number of apples
in a seed…
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
The Case Against “Rural Innovation”
Being a Thing…• Rural concentration of less educated
individuals—less innovative capacity
• Rural concentration of lower-skilled, lower
paid, more routine industries—product cycle:
new ideas start in cities then filter down
• Rural patenting rates are very low—few hard
statistics we have on innovation suggest a
largely urban phenomenon
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
Patenting Rates Per Capita, 2000 to 2005
Source: Disambiguated Patent Data, USPTO
and ERS Calculations
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
…Suffers from the Ecological Fallacy
• Nature of individuals are deduced from the
group to which those individuals belong.
• Rural patenting productivity reduced by larger
share of population outside the “innovation
economy”
• What if instead we computed patenting rates
on individuals who might plausibly contribute
to patenting?
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
Source: Disambiguated Patent Data, USPTO, ACS
Occupational Data and ERS Calculations
Patenting Rates Per Inventive Class Member, 2000 to 2005
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
What about Grassroots Innovation
that Doesn’t Leave a Paper Trail?
• Could we just ask firms: Are you
innovative?
• Or, Have you introduced a new product
or service in the last 3 years?
• The European Union has been doing this
for more than 20 years, but with mixed
results
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
Problems with Innovation Data
Generated by EU CIS• North & Smallbone: 49% of rural mfg. firms self-
reported as innovative, but expert evaluation of “innovations” only identified 24% of firms as “highly innovative.”
• 2007 Commerce Dept. Advisory Committee on Measuring Innovation in the 21st Century Economy: “Detailed innovation surveys such as the European Community’s Community Innovation Survey . . . are very costly and have encountered both definitional and response rate problems.”
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
Distinguishing 3 Types of Innovation
• I = R&D driven, utilizing STEM human resources,
leaving intellectual property trail. NSF
congressionally mandated to collect these data.
• iS = substantive innovation of new products,
processes or practices, few if any traditional
innovation inputs, but leads to favorable market
outcomes.
• iN = nominal innovation, no traditional innovation
inputs and has no impact on market outcomes
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
Can simple questions elicit innovation
markers? • EU CIS Survey core questions in combination
with other observable characteristics
–New or significantly improved goods, services, processes, logistics, marketing methods.
–Are innovation investments capital constrained?
–Acknowledge failed innovation initiatives?
–Possess intellectual property worth protecting?
–Does data drive decision-making?
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
2014 ERS Rural Establishment
Innovation Survey• Funded by USDA’s Rural Development Mission Area
• First nationally representative self-reported innovation survey for Rural America.
• Oversampled rural establishments but allocated a quarter of the sample to urban establishments for comparison
• Sample size 11,000 for all establishments with 5 or more employees in tradable sectors
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
Three Latent Classes Identified:
Means of Core Auxiliary Variables Class Membership Probabilities 0.2121 0.3237 0.4642
Variable
Substantive Innovators Non-Innovators
Data Driven Nominal
Innovators
Innovation Projects Abandoned and Incomplete 0.395 0.1061 0.1152Innovation Projects Abandoned or Incomplete 0.3464 0.1373 0.1562Surplus Funds Used for Innovation
Not Likely 0.0239 0.497 0.2888Probably 0.4321 0.3454 0.4946
Definitely 0.544 0.1576 0.2166Intellectual Property Protection 0.7038 0.1434 0.1278
Source: Rural Establishment Innovation Survey Provisional Data as of 10/1/14
Source: Rural Establishment Innovation Survey Provisional Data as of 10/1/14
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
Comparing Percent Classified as Substantive
Innovators Across Nonmetro and Metro Areas
Source: Rural Establishment Innovation Survey Provisional Data as of 10/1/14
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
User Entrepreneurship• New products brought to market that were first
developed for own use.
• REIS to provide first estimate of how important user e-ship is to national and rural economy
• Move beyond data to get a much richer understanding of how extension professionals, community college faculty, other change agents can better assist these “accidental entrepreneurs”
• Collect your own anecdotes and questions to bring to NACDEP 2016 for a user entrepreneurship workshop to help us design the qualitative research phase.
The views expressed are those of the author(s) and should not be attributed to the Economic Research Service or USDA.
It is undeniable that the exercise of a creative power,
that a free creative activity, is the true function of
man. It is proved to be so by man’s finding in it his
true happiness.
--Matthew Arnold 1885